Online TV service SeeSaw has been saved from closure by a consortium of investors including the former Channel 4 chief executive, Michael Jackson, in a deal led by the US private equity firm that snapped up Bebo for a knockdown price.

Criterion Capital Partners has taken a controlling stake in SeeSaw, which is owned by transmission business Arqiva, in a deal estimated to be worth well over £10m.

The private equity firm has pulled together a group of investors from the film, TV and new media industry – including Dan Adler, a former Disney and Creative Artists Agency senior executive, who will build international relations with studios – with Arqiva retaining a 25% stake in the business and a seat on the new board.

Criterion, which will hold a majority stake in SeeSaw, has appointed Jackson as chairman.

"The TV industries in the U.K. and abroad will continue to be reshaped in ways no one can quite predict, however it is clear that web-delivered programming will play a vital role in that transformation," said Jackson. "The technology behind SeeSaw is world class and the group behind the bid has a great mix of entrepreneurial and industry experience."

The two businesses will be run separately but synergies between the operations will be explored.

Criterion plans to continue to keep SeeSaw headquartered in London and "most" key staff members – including the platform controller, John Keeling, the commercial director, Matt Rennie, and the tech chief, Richard Dines – will stay with the company. SeeSaw employs 28 staff and the new owners plan to keep the business based in London.

On the basis Arqiva put substantial investment into getting SeeSaw to launch, not to mention striking almost 20 programming deals for more than 3,000 hours of programming, it is thought that the venture would have sold for more than £10m. Criterion and Arqiva declined to comment on the value of the deal.

SeeSaw attracts about 900,000 unique visitors a month, with about 700,000 residing in the UK.

Criterion is headed by Adam Levin who has been aggressively pursuing a strategy of buying and turning around companies with revenue between $3m (£1.8m) and $30m.

"We are thrilled to bring SeeSaw into our portfolio, not just because of the industrial strength of its technology but because it is perfectly suited for the next wave of television viewing currently upon us," he said.

Despite being unable to make a success of SeeSaw, Arqiva said it remains committed and is "pleased" to be retaining such a sizeable stake.

"SeeSaw, and Project Kangaroo before it, is the product of many years of hard work and innovation from some of the best technical and programming minds in the entertainment industry," said John Cresswell, the ITV chief executive who now heads up Arqiva. "We are pleased to retain a sizeable stake in SeeSaw and optimistic for its future."

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